In the not-so-distant future small employers may stop offering employer-sponsored health coverage because employees will demand it, said a speaker at the recent Workplace Benefits Summit in New Orleans.
The biggest change will affect low income employees, who may receive affordable coverage through the workplace, but not for their dependents, said Rodger Bayne, president of Towson, Md.-based Benefit Indemnity Corp., at the Summit, sponsored by HIX’s parent company, SourceMedia.
For those employees who are eligible for a government-sponsored tax subsidy on the exchange, having employer-sponsored coverage will prevent them from bringing their family to the exchanges for coverage and receiving a tax credit.
“For the first time ever, that employee goes to the employer and asks for health coverage to be dropped,” Bayne said. “Because for every minute [the employer] pays, [the employee] can’t go to the exchange and get” the subsidy.
Bayne predicts a typical employer response would be, “I can’t do that,” because that would mean dropping coverage for all other employees, too. He then believes an employee would respond by leaving the company.
“We could have a situation where the employee hates the employer for offering [health] coverage,” he explained. “That’s about to be a lot of small employers.”
Therefore, Bayne predicts the employer will inevitably drop the coverage, as the compliance burden alone is too cumbersome, and they can send their employees to the exchange where they will receive a tax credit larger than the employer could provide.
Brian M. Kalish is a reporter at Employee Benefit Advisor, a SourceMedia publication.
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